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Sharp Import Duty Cut Likely on Electric Cars

India is considering slashing import duties on electric cars to as low as 40%, two senior government officials told Reuters, day after Tesla Inc’s appeals for a cut polarized the country’s auto industry.

For imported electric vehicles (EVs) with a value of less than $40,000- including the car’s cost, insurance and freight- the government is discussing slashing the tax rate to 40% from 60% presently, the officials told Reuters.

For EVs valued at more than $40,000, it is looking at cutting the rate to 60% from 100%, they said.

“We haven’t firmed up the reduction in duties yet, but there are discussions that are ongoing,” one of the officials said.

India is the world’s fifth-largest car market with annual sales of about 3 million vehicles but the majority of cars sold are priced below $20,000.

EVs make up a fraction of the total and luxury EV sales are negligible, according industry estimates.

Tesla, in its pitch to the government-first reported by Reuters in July, argued that lowering import duties on EVs to 40% would make them more affordable and boost sales.  S-ET

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